Entrepreneurship. Rhonda Abrams
around for a long time, we are now in a golden age of entrepreneurship. Throughout the world, entrepreneurs are making a greater impact than ever before, and gaining the recognition that comes from that impact.
Although much attention is paid to technology-based start-ups, especially in places like Silicon Valley in California, the truth is entrepreneurship is flowering in all industries and geographic locations around the world. Even concepts that once were the sole province of philanthropists and charitable organizations have now become the interest of entrepreneurs who aim to apply their innovative and strategic thinking to solving some of the globe’s most pressing problems.
Indeed, since the earliest part of the 21st century, there has been a ground shift. The best and the brightest in our society, who before might have gone to work for big corporations, now want to start their own ventures, at younger and younger ages. Some of the growth in entrepreneurial desire has certainly come from seeing the example of those who have succeeded—especially young entrepreneurs—who have created whole new industries, transformed the way we live and work, and made fortunes along the way. Seemingly overnight, entrepreneurs have become millionaires—even billionaires—as a result of launching innovative businesses.
Of course, most entrepreneurs never become millionaires. Yet the chance to act on your ideas, to make your own way, to create new products, to invent new services, and to make a difference in the world, has encouraged record numbers of people to become entrepreneurs.
Eventually everyone is an entrepreneur
Pinning down the number of independent contractors in the U.S. can be difficult, as the Bureau of Labor Statistics does not track this growing group of self-employed workers. A 2014 report from the non-profit Freelancer’s Union and Elance-oDesk claims that 53 million Americans now work as freelancers. That translates to 34 percent of the population, up from 31 percent in a 2006 study from US General Accountability Office. With mobile devices, the ability to plug in virtually anywhere, and online marketplaces that match freelancers with customers—Uber, Task Rabbit, and Upwork, for example—expect the number of freelancers to continue to rise.
Factors driving the growth of entrepreneurship
Besides the example of successful entrepreneurs, what’s propelling the rapid growth of interest in launching one’s own businesses?
■ Less job stability. The days are long gone when people assumed they would work for one company all their lives. For starters, a large number of businesses today run extraordinarily “lean.” Rather than hiring full-time permanent employees, many businesses opt for part-time personnel or either temporary or contract workers. There has also been a cultural shift in how people view their employment and careers. Most people expect to—want to—change jobs. A person born in the later years of the “baby boom” (1957–1964) held an average number of 11 jobs just between ages 18 and 44.1 Younger people today are likely to have as many different jobs, if not more. Indeed, it’s typical for people in developed countries, especially the United States, to have two, three, or even more “careers” over the course of their lifetimes as their interests change and evolve. With less job stability, there’s more opportunity—and more need—to start your own business.
■ Lifestyle driving career choices. Want to live in the mountains so you can ski, or by the beach so you can surf? Be home in the afternoon to raise your kids? Increasingly, people want their careers to mesh with their lifestyle goals. Entrepreneurship allows much more flexibility to create an income in a way that meets personal goals. You can create businesses in locales where the kind of job you want doesn’t exist, have more flexibility in work hours, and spend less time commuting and more time on family, hobbies, or other interests. The desire for a lifestyle that a traditional job can’t satisfy is one key reason that people choose an entrepreneurial path.
■ Technology infrastructure. It has become cheaper and easier than ever to start a businesses. Businesses that once required a huge upfront investment in infrastructure, equipment, and staff can now do a lot more for a lot less. Many of the daily administrative and office tasks can easily be automated; a huge array of companies exists to provide technology solutions to small and new businesses. Web design firms, search marketing specialists, third-party IT services providers, and all sorts of consultants represent merely a few of the new types of business opportunities that have emerged. It’s possible to build a fairly substantial business with only a virtual team, especially for technology needs.
REAL-WORLD RECAP
The drivers of entrepreneurship
■ Less job stability
■ Lifestyle driving career choices
■ Technology infrastructure
■ Technology innovation
■ Government support for entrepreneurs
■ Mature financing environment
■ Financial considerations
■ Disruptive innovation
■ It’s cool
■ Technology innovation. New technology creates new business opportunities. The Internet, in particular, over the last few decades has created entire new industries—mobile, cloud, and social media. Advances in technology and science have led to an explosion in biotech, genetics, and medical equipment and other health care–related industries. “Green” technology is providing significant new prospects in a wide range of environmentally related businesses. In virtually every category, the rapid changes in underlying technology have opened up great possibilities for entrepreneurs.
■ Government support for entrepreneurs. Throughout the world, governments have increasingly recognized the importance of new ventures and small businesses for their economic growth and health. National governments are setting up agencies to assist entrepreneurs, lessening regulation and red tape for starting new businesses, and providing tax benefits. Even state, regional, and local governmental entities are getting in on the act, helping to make it easier for new business formation. Officials realize that without new businesses economies stagnate.
■ Mature financing environment. Investors have become more and more comfortable with putting their funds into new and risky ventures. The unbelievable financial success of those who have invested in entrepreneurial ventures since the late 1990s has led to the growth of a large pool of investors willing to take risks on entrepreneurs and new ventures. There’s now a mature, sophisticated, and well-funded investing community in a few key regions of developed countries. And, even in smaller communities and less developed areas, many more private investors—“angel investors”—are willing to support entrepreneurs. The availability of more venture capital means the possibility of many more new businesses launching.
■ Financial considerations. Many people simply don’t feel they can meet their financial goals by working for an hourly wage or even a professional-level salary. This is especially true in areas with few high-growth and professional opportunities, as well as in many developing countries. The notoriety given to young multimillionaire founders and early employees of high-tech start-ups has fueled many people’s dreams. No surprise, then, that many people feel that they can achieve their financial goals more fully and easily if they choose to become self-employed—or to build their own business and employ others.
■ Disruptive innovation. Shake it up. See it new. Disruption occurs when fresh eyes and fresh thinking transform old industries and business models, often creating highly valuable companies. Many times, the entrepreneurs behind such disruptive companies or innovations have little or no experience in an industry, but see a need and a better way to fill that need. For example, room-letting